WINFIELD TOWNSHIP SCHOOL DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2016

Transcription

1 COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30,

2 Winfield Township School District Winfield, New Jersey Comprehensive Annual Financial Report For The Fiscal Year Ended June 30,

3 COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE WINFIELD, NEW JERSEY FOR THE FISCAL YEAR ENDED JUNE 30, 2016 Prepared by Winfield Township School District Finance Department And Barre & Company, CPAs 3

4 STATE BOARD OF EDUCATION MARK W. BIEDRON...Hunterdon President JOSEPH FISICARO...Burlington Vice President ARCELIO APONTE...Middlesex RONALD K BUTCHER...Gloucester JACK FORNARO...Warren EDITHE FULTON...Ocean ERNEST P. LEPORE...Hudson ANDREW J. MULVIHILL...Sussex J. PETER SIMON...Morris DOROTHY S. STRICKLAND...Essex David C. Hespe, Commissioner of Education Secretary, State Board of Education 1

5 TABLE OF CONTENTS Page INTRODUCTORY SECTION... 1 Letter of Transmittal... 2 Organizational Chart... 7 Roster of Officials... 8 Consultants and Advisors... 9 FINANCIAL SECTION Independent Auditor s Report REQUIRED SUPPLEMENTARY INFORMATION PART I Management s Discussion and Analysis BASIC FINANCIAL STATEMENTS SECTION A - DISTRICT-WIDE FINANCIAL STATEMENTS A-1 Statement of Net Position A-2 Statement of Activities SECTION B - FUND FINANCIAL STATEMENTS GOVERNMENTAL FUNDS B-1 Balance Sheet B-2 Statement of Revenues, Expenditures, and Changes in Fund Balance B-3 Reconciliation of the Statements of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities PROPRIETARY FUNDS B-4 Statement of Net Position B-5 Statement of Revenues, Expenses, and Changes in Net Position B-6 Statement of Cash Flows FIDUCIARY FUNDS B-7 Statement of Fiduciary Net Position B-8 Statement of Changes in Fiduciary Net Position NOTES TO THE FINANCIAL STATEMENTS REQUIRED SUPPLEMENTARY INFORMATION PART II

6 TABLE OF CONTENTS Page FINANCIAL SECTION (CONTINUED) SECTION C BUDGETARY COMPARISON SCHEDULE C-1 Budgetary Comparison Schedule General Fund C-1a Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual... N/A C-1b Community Development Block Grant Budget and Actual... N/A C-2 Budgetary Comparison Schedule Special Revenue Fund NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION PART II C-3 Budget-to-GAAP Reconciliation REQUIRED SUPPLEMENTARY INFORMATION PART III SECTION L DISTRICT S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY FOR TPAF AND PERS AND DISTRICT S PERS CONTRIBUTION L-1 Schedules of the School District s Proportionate Share of the Net Pension Liability PERS L-2 Schedules of School District Contributions PERS L-3 Schedules of the School District s Proportionate Share of the Net Pension Liability TPAF NOTES TO REQUIRED SUPPLEMENTARY INFORMATION PART III OTHER SUPPLEMENTARY INFORMATION SECTION D SCHOOL BASED BUDGET SCHEDULES... N/A D-1 Combining Balance Sheet... N/A D-2 Blended Resource Fund Schedule of Expenditures Allocated by Resource Type Actual... N/A D-3 Blended Resource Fund Schedule of Blended Expenditures Budget and Actual... N/A SECTION E SPECIAL REVENUE FUND E-1 Combining Schedule of Revenues and Expenditures Budgetary Basis E-2 Preschool Education Aid Schedule(s) of Expenditures Budgetary Basis... N/A SECTION F CAPITAL PROJECTS FUND... N/A F-1 Summary Schedule of Project Expenditures... N/A F-2 Summary Schedule of Revenues, Expenditures, and Changes in Fund Balance Budgetary Basis... N/A F-2(x) Schedule(s) of Project Revenues, Expenditures, Project Balance, and Project Status Budgetary Basis... N/A 2

7 TABLE OF CONTENTS Page FINANCIAL SECTION (CONTINUED) SECTION G PROPRIETARY FUND ENTERPRISE FUND... N/A G-1 Combining Schedule of Net Position... N/A G-2 Combining Schedule of Revenues, Expenditures, and Changes in Net Position... N/A G-3 Combining Schedule of Cash Flows... N/A INTERNAL SERVICE FUND... N/A G-4 Combining Schedule of Net Position... N/A G-5 Combining Schedule of Revenues, Expenditures, and Changes in Net Position... N/A G-6 Combining Schedule of Cash Flows... N/A SECTION H FIDUCIARY FUNDS H-1 Combining Statement of Fiduciary Net Position H-2 Statement of Changes in Fiduciary Net Position H-3 Student Activity Agency Fund Schedule of Receipts and Disbursements H-4 Payroll Agency Fund Schedule of Receipts and Disbursements SECTION I LONG-TERM DEBT SCHEDULES I-1 Schedule of Serial Bonds... N/A I-2 Schedule of Obligations under Capital Leases I-3 Debt Service Fund Budgetary Comparison Schedule... N/A STATISTICAL SECTION (UNAUDITED) INTRODUCTION TO THE STATISTICAL SECTION FINANCIAL TRENDS J-1 Net Assets/Position by Component J-2 Changes in Net Assets/Position J-3 Fund Balances Governmental Funds J-4 Changes in Fund Balances Governmental Funds J-5 General Fund Other Local Revenue by Source REVENUE CAPACITY J-6 Assessed Value and Estimated Actual Value of Taxable Property J-7 Direct and Overlapping Property Tax Rates J-8 Principal Property Taxpayers* J-9 Property Tax Levies and Collections

8 TABLE OF CONTENTS Page STATISTICAL SECTION (CONTINUED) DEBT CAPACITY J-10 Ratios of Outstanding Debt by Type J-11 Ratios of General Bonded Debt by Type J-12 Direct and Overlapping Governmental Activities Debt J-13 Legal Debt Margin Information DEMOGRAPHIC AND ECONOMIC INFORMATION J-14 Demographic and Economic Statistics J-15 Principal Employers OPERATING INFORMATION J-16 Full-time Equivalent District Employees by Function/Program J-17 Operating Statistics J-18 School Building Information J-19 Schedule of Required Maintenance Expenditures by School Facility J-20 Insurance Schedule *Private citizens should be listed as Individual Taxpayer 1, Individual Taxpayer 2, etc. SINGLE AUDIT SECTION K-1 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based On an Audit of Financial Statements Performed In Accordance With Government Auditing Standards K-2 Report on Compliance For Each Major State Program; Report On Internal Control over Compliance; and Report on the Schedule of Expenditures of State Financial Assistance as Required by New Jersey OMB Circular K-3 Schedule of Federal Financial Awards Schedule A K-4 Schedule of State Financial Assistance Schedule B K-5 Notes to the Schedules of Expenditures of Awards and Financial Assistance K-6 Schedule of Findings and Questioned Costs K-7 Summary Schedule of Prior Audit Findings and Questioned Costs as Prepared by the Management

9 INTRODUCTORY SECTION 1 1

10 7 1/2 GULFSTREAM AVENUE WINFIELD, NEW JERSEY (908) Letter of Transmittal November 18, 2016 Honorable President and Members of the Board of Education Winfield Township School District County of Union, New Jersey Dear Board Members: The Comprehensive Annual Financial Report (CAFR) of the Winfield Township School District (the District ) for the fiscal year ended June 30, 2016, is hereby submitted. Responsibility for both the accuracy of the data and completeness and fairness of the presentation, including all disclosures, rests with the management of the Board of Education (the Board ). To the best of our knowledge and belief, the data presented in this report is accurate in all material respects and is reported in a manner designed to present fairly the basic financial statements and results of operations of the various funds of the District. All disclosures necessary to enable the reader to gain understanding of the District s financial activities have been included. This report will provide the taxpayers of Winfield Township with comprehensive financial data in a format enabling them to gain an understanding of the District s financial affairs. The Comprehensive Annual Financial Report is presented in four sections as follows: The Introductory Section contains a table of contents, Letter of Transmittal, List of Principal Officials, and an Organizational Chart of the School District; The Financial Section begins with the Independent Auditor s Report and includes the Management s Discussion and Analysis, the Basic Financial Statements and Notes providing an overview of the District s financial position and operating results, and other schedules providing detailed budgetary information; The Statistical Section includes selected economic and demographic information, financial trends, and the fiscal capacity of the District, generally presented on a multi-year basis; 2 2

11 The Single Audit Section The District is required to undergo an annual single audit in conformity with the provisions of Government Auditing Standards, issued by the Comptroller General of the United States; the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and the audit requirements as prescribed by the Office of School Finance, Department of Education, State of New Jersey; the New Jersey State Office of Management and Budget (OMB) Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Information related to this single audit, including the independent auditor s report on the internal control and compliance with applicable laws, regulations, contracts and grants, along with findings and questioned costs, are included in the single audit section of this report. School District Organization An elected nine-member Board of Education (the Board ) serves as the policy maker for the District. The Board adopts an annual budget and directly approves all expenditures which serve as the basis for control over and authorization for all expenditures of the School District tax money. The Superintendent is the chief executive officer of the School District, responsible to the Board for total educational and support operations. The Board Secretary is the chief financial officer of the School District, responsible to the Board for maintaining all financial records, issuing warrants in payment of liabilities incurred by the School District, acting as custodian of all School District funds, and investing idle funds as permitted by New Jersey law. 1) REPORTING ENTITY AND ITS SERVICES: Winfield Township School District is an independent reporting entity within the criteria adopted by the Governmental Accounting Standards Board (GASB) as established by GASB Statement No. 14. All funds and account groups of the District are included in this report. The Winfield Board of Education and all its school constitute the District s reporting entity. The District provides a full range of educational services appropriate to grade levels Pre-K through 8. These include regular, as well as special education programs for handicapped youngsters. The current enrollment in the school is

12 The following details the changes in the student enrollment of the District over the last five years. Average Daily Enrollment Fiscal Student Percent Year Enrollment Change % % % % % 2) ECONOMIC CONDITION AND OUTLOOK: The Township of Winfield has not shown any major changes in the growth of the community. No new homes have been built, with resident mobility being a result of resident unit turnover. The commercial operations remain very small; all located near the Mutual Housing Corporation headquarters. The corporation continues their campaign to upgrade the residential units with appropriate renovations. New funding formulas at the State and Federal levels have produced an uncertain fiscal support environment. Given this fact, the district remains conservative in its fiscal management. The district is committed to operating as efficiently as possible while continuing to offer a comprehensive quality education for every student. 3) MAJOR INITIATIVES: The District is committed to curriculum enhancement and instructional program development. Implementation of and adherence to state developed Core Curriculum standards continue to be a major initiative. Curriculum and text materials continue to be evaluated on a regular basis, with scheduled reviews and modifications acted upon as needed. Technological initiatives remain a district priority. Modern technologies continue to be introduced to students in the Media Center and classroom setting for enhanced learning capabilities. The District commitment to student development consists of classroom learning via quality instruction, while offering and educational environment that will aid in the physical and social development of our students, while maintaining safety as a major priority in this endeavor. 4) INTERNAL ACCOUNTING CONTROLS: Management of the District is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the District are protected from loss, theft or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles (GAAP). The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: 4 4

13 (1) the cost of control should not exceed the benefits likely to be derived (2) the valuation of costs and benefits requires estimates and judgments by management. As a recipient of Federal and State financial assistance, the District is also responsible for ensuring that an adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to those programs. This internal control structure is subject to periodic evaluation by the District management. As part of the District s single audit described earlier, tests are made to determine the adequacy of the internal control structure, including that portion related to Federal and State financial assistance programs, as well as to determine that the District has complied with applicable laws, regulations, contracts, and grants. 5) BUDGETARY CONTROLS: In addition to internal accounting controls, the District maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the voters of the municipality. Annual appropriated budgets are adopted for the general fund and the special revenue fund. The final budget amount as amended for the fiscal year is reflected in the financial section. An encumbrance accounting system is used to record outstanding purchase commitments on a line item basis. Open encumbrances at year-end are either cancelled or are included as reappropriations of fund balance in the subsequent year. Those amounts to be reappropriated are reported as reservations of fund balance at June 30, ) CASH MANAGEMENT: The investment policy of the District is guided by state statute as detailed in Notes to Basic Financial Statements, Note 2. The District has adopted a cash management plan which requires it to deposit public funds in public depositories protected from loss under the provisions of the Governmental Unit Deposit Protection Act ( GUDPA ). GUDPA was enacted in 1970 to protect governmental units from a loss of funds on deposit with a failed banking institution in New Jersey. The law requires governmental units to deposit public funds only in public depositories located in New Jersey, where the funds are secured in accordance with the Act. 7) RISK MANAGEMENT: The Board carries various forms of insurance, including but not limited to general liability, hazard and theft insurance on property and contents, and fidelity bonds. A schedule of insurance coverage is found in J

14 8) OTHER INFORMATION: Independent Audit State statutes require an annual audit by independent certified public accountants or registered municipal accountants. The accounting firm of Barre & Company, Certified Public Accountants, was selected by the Board. In addition to meeting the requirements set forth in State statutes, the audit also was designed to meet the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and the New Jersey State Office of Management and Budget (OMB) Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. The auditor s report on the basic financial statements and specific required supplemental information is included in the financial section of this report. The auditor s reports, related specifically to the single audit, are included in the single audit section of this report. 9) ACKNOWLEDGMENTS: We would like to express our appreciation and thanks to the members of the Winfield Township School District s Board of Education for their determined effort to provide fiscal accountability to the citizens and taxpayers of the school district and thereby contributing their full support to the development and maintenance of our financial operation. Respectfully submitted, Gabrielle Conde Business Administrator/Board Secretary 6 6

15 Organizational Chart WINFIELD, NEW JERSEY Organizational Chart Board of Education Chief School Administrator Business Administrator Teaching Staff Office/Custodial Staff 7 7

16 WINFIELD, NEW JERSEY Roster of Officials ROSTER OF OFFICIALS JUNE 30, 2016 MEMBERS OF THE BOARD OF EDUCATION TERM EXPIRES Ms. Virginia Blackwell 2017 Ms. Shana LaRocca 2018 Mrs. Sandra Tobias 2017 Mr. Timothy Heuser 2018 Mrs. Maureen Byrne 2016 Mr. Adam Koomer 2017 Mrs. Lorraine Schwarze 2016 Mr. Frederick Viteka 2016 Mrs. Ann Marie Weiss 2017 OTHER OFFICIALS Mr. Ross LeBrun, Chief School Administrator Ms. Gabrielle Conde, School Business Administrator/Board Secretary Mrs. Donna Hughes, Treasurer Mr. Mark Tabakin, Solicitor 8 8

17 WINFIELD, NEW JERSEY Consultants and Advisors CONSULTANTS AND ADVISORS Audit Firm Barre & Company Certified Public Accountants 2204 Morris Avenue, Suite 206 Union, New Jersey Attorney Weiner Lesniak 629 Parsippany Road Post Office Box 0438 Parsippany, NJ Official Depository TD Bank 1701 Route 70 East Bank of America 601 North Wood Avenue 9 9

18 FINANCIAL SECTION 10 10

19 BARRE & COMPANY CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS 2204 Morris Avenue, Suite 206 Union, New Jersey (908) Independent Auditor s Report Honorable President Members of the Board of Education Winfield Township School District County of Union Winfield, New Jersey Report on the Financial Statements FAX (908) Independent Auditor's Report We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Winfield Township School District (School District), in the County of Union, State of New Jersey, as of and for the fiscal year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the School District s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements The School District s management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audit contained in Government Auditing Standards, issued by the Comptroller General of the United States; and audit requirements as prescribed by the Office of Finance, Department of Education, State of New Jersey. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. info@cpa-bc.com 5 Independence Way Suite 300 Princeton, NJ (609)

20 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of the Winfield Township School District, in the County of Union, State of New Jersey, as of June 30, 2016, and the respective changes in the financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management s Discussion and Analysis, Budgetary Comparison Information, and District s Proportionate Share of the Net Pension Liability for TPAF and PERS and District s PERS Contributions and the related notes starting on pages 16, 84, and 94, respectively, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s response to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance

21 Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the School District s basic financial statements. The accompanying supplementary information such as the combining and individual nonmajor fund financial statements and schedules of expenditures of federal awards and state financial assistance, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and New Jersey s OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid, respectively; and the other information, such as the introductory and statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules of expenditures of federal awards and state financial assistance are the responsibility of management and were derived from and relate directly to the underlying accounting and other records use to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedules of expenditures of federal awards and state financial assistance are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it

22 Other Reporting Required by Government Auditing Standards and the Division of Finance, Department of Education, State of New Jersey In accordance with Government Auditing Standards and the Division of Finance, Department of Education, State of New Jersey, we have also issued our report dated November 18, 2016 on our consideration of the Winfield Township School District s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal controls over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and the Division of Finance, Department of Education, State of New Jersey in considering the School District s internal control over financial reporting and compliance. BARRE & COMPANY Certified Public Accountants Public School Accountants Union, New Jersey November 18, 2016 Richard M. Barre Public School Accountant PSA Number CS

23 REQUIRED SUPPLEMENTARY INFORMATION PART I 15 15

24 WINFIELD, NEW JERSEY MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 UNAUDITED Management s Discussion and Analysis The Management s Discussion and Analysis (MD&A) of Winfield Township School District s financial performance provides an overall review of the School District s financial activities for the fiscal year ended June 30, The intent of this discussion and analysis is to look at the School District s financial performance as a whole; readers should also review the basic financial statements and notes to enhance their understanding of the School District s financial performance. Certain comparative information between the current year ( ) and the prior year ( ) is required to be presented in the MD&A. Financial Highlights Key financial highlights for 2016 are as follows: General revenues accounted for $3,427,130 in revenue or 94% of all revenues. Program specific revenues in the form of charges for services and operating grants and contributions accounted for $209,190 or 6% of total revenues of $3,636,320. The School District had $3,656,292 in expenses; with $209,190 of these expenses were offset by program specific charges for services, grants or contributions. General revenues of $3,427,130 were not adequate to provide for these programs. Among governmental funds, the General Fund had $3,527,475 in revenues and $3,526,103 in expenditures and other financing sources. The General Fund s fund balance increased $1,372 over This increase was anticipated by the Board of Education. Using this Comprehensive Annual Financial Report (CAFR) This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand Winfield Township School District as a financial whole, an entire operating entity. The statements then proceed to provide an increasingly detailed look at specific financial activities

25 WINFIELD, NEW JERSEY MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 UNAUDITED (CONTINUED) Using this Comprehensive Annual Financial Report (CAFR) (Continued) The Statement of Net Position and Statement of Activities provide information about the activities of the whole School district, presenting both an aggregate view of the School district s finances and a longer-term view of those finances. Fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short-term as well as what remains for future spending. The fund financial statements also look at the School district s most significant funds with all other non-major funds presented in total in one column. In the case of Winfield Township School District, the General Fund is by far the most significant fund. Reporting the School District as a Whole Statement of Net Position and the Statement of Activities While this document contains the large number of funds used by the School District to provide programs and activities, the view of the School district as a whole looks at all financial transactions and ask the question, How did we do financially during 2016? The Statement of Net Position and the Statement of Activities answer this question. These statements include all assets and liabilities using the accrual basis of accounting similar to the accounting used by most private-sector businesses. This basis of accounting takes into account all of the current year s revenues and expenses regardless of when cash is received or paid. These two statements report the School District s net position and changes in that position. This change in net position is important because it tells the reader that, for the school district as a whole, the financial position of the School District have improved or diminished. The causes of this change may be the result of many factors, some financial and some not. Non-financial factors include the School District s property tax base, current laws in New Jersey restricting revenue growth, facility condition, required educational programs and other factors. In the Statement of Net Position and the Statement of Activities, the School District is divided into two distinct kinds of activities: Governmental activities All of the School District s programs and services are reported here including instruction, support services, operation and maintenance of plant facilities, pupil transportation and extracurricular activities. Business-Type Activity This service is provided on a charge for goods or services basis to recover all the expenses of the goods or services provided. The Food Service enterprise fund is reported as a business activity

26 WINFIELD, NEW JERSEY MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 UNAUDITED (CONTINUED) Reporting the School District s Most Significant Funds Fund Financial Statements Fund financial reports provide detailed information about the School District s funds. The School District uses many funds to account for a multitude of financial transactions. The School District s governmental funds are the General Fund and Special Revenue Fund. Governmental Funds The School District s activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in the future years. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School district s general government operations and the basic services it provides. Governmental fund information helps the reader determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds is reconciled in the financial statements. Enterprise Fund The enterprise fund uses the same basis of accounting as business-type activities; therefore, these statements are essentially the same. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the District-wide and fund financial statements. The notes to the financial statements can be found starting on page 43 of this report. The School District as a Whole Recall that the Statement of Net Position provides the perspective of the School District as a whole. Net position may serve over time as a useful indicator of a government s financial position. The District s financial position is the product of several financial transactions including the net results of activities, the acquisition and payment of debt, the acquisition and disposal of capital assets, and the depreciation of capital assets

27 WINFIELD, NEW JERSEY MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 UNAUDITED (CONTINUED) The School District as a Whole (Continued) Table 1 provides a summary of the School District s net position for 2016 and Table 1 Net Position Assets Current and Other Assets $ 52,882 $ 57,404 Capital Assets 31,600 31,600 Total Assets 84,482 89,004 Deferred Outflows of Resources Pensions 201,577 29,353 Liabilities Account and Other Payables 58,255 64,197 Other Current Liabilities 2,867 2,105 Long-Term Liabilities 858, ,432 Total Liabilities 919, ,734 Deferred Inflows of Resources Pensions 13,328 35,668 Net Position Net Investment in Capital Assets 31,600 31,600 Restricted 65,244 65,444 Unrestricted (743,861) (724,089) Total Net Position $ (647,017) $ (627,045) 19 19

28 WINFIELD, NEW JERSEY MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 UNAUDITED (CONTINUED) The School District as a Whole (Continued) The District s combined net position (deficit) were ($647,017) on June 30, 2016, and ($627,045) for Table 2 shows changes in net position for fiscal years ended 2016 and Table 2 Changes in Net Position Revenues Program Revenues: Charges for Services $ 35,005 $ 38,728 Operating Grants and Contributions 174, ,810 General Revenues: Property Taxes 1,557,450 1,526,912 Grants and Entitlements 1,865,852 1,800,529 Other 3,828 15,386 Total Revenues 3,636,320 3,557,365 Program Expenses Instruction 1,719,077 1,656,047 Support Services: Tuition 638, ,337 Student and Instruction Related 429, ,308 General and Business Administrative 212, ,989 School Adminstrative 56,187 49,712 Plant Operations and Maintenance 368, ,928 Pupil Transportation 161, ,163 Capital Outlay 10,000 10,000 Food Service 61,280 59,901 Total Program Expenses 3,656,292 3,649,385 Changes in Net Position $ (19,972) $ (92,020)

29 Governmental Activities WINFIELD, NEW JERSEY MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 UNAUDITED (CONTINUED) The unique nature of property taxes in New Jersey creates the legal requirements to annually seek voter approval for the School District operations. Property taxes made up 43% for 2016 and 44% for 2015 of revenues for governmental activities for the Winfield Township School District. The District s total revenues were $3,589,454 for the year ended June 30, 2016, and $3,508,201 for Federal, state, and local grants accounted for another 57% for 2016 and 56% for 2015 of revenues which includes $298,392 for 2016 and $256,985 for 2015 of state reimbursed TPAF pension and TPAF social security contributions. The total cost of all program and services was $3,595,012 for 2016 and $3,589,484 for Instruction comprises 48% for 2016 and 46% for 2015 of District s expenses. Business-Type Activities Revenues for the District s business-type activities (food service program) were comprised of charges for services and federal and state reimbursements. Food service expenses exceeded revenues by $714 for 2016 and by $137 for Charges for services represent $30,315 for 2016 and $30,988 for 2015 of revenues. This represents amounts paid by patrons for daily food. Federal and state reimbursements for meals, including payments for free and reduced lunches and breakfast, and food distribution program were $16,551 for 2016 and $18,176 for Governmental Activities The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows the total cost of services and the net cost of services. The net cost shows the financial burden that was placed on the District s taxpayers by each of these functions

30 WINFIELD, NEW JERSEY MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 UNAUDITED (CONTINUED) Governmental Activities (Continued) Table 3 Total Cost of Services Instruction $ 1,719,077 $ 1,656,047 Support Services: Tuition 638, ,337 Student and Instruction Related 429, ,308 General and Business Administrative 212, ,989 School Administrative 56,187 49,712 Plant Operations and Maintenance 368, ,928 Pupil Transportation 161, ,163 Capital Outlay 10,000 10,000 Total Expenses $ 3,595,012 $ 3,589,484 Net Cost of Services Instruction $ 1,617,228 $ 1,551,148 Support Services: Tuition 638, ,337 Student and Instruction Related 429, ,308 General and Business Administrative 212, ,989 School Administrative 56,187 49,712 Plant Operations and Maintenance 368, ,928 Pupil Transportation 100, ,688 Capital Outlay 10,000 10,000 Total Expenses $ 3,432,688 $ 3,424,110 Instruction expenses include activities directly dealing with the teaching of pupils and the interaction between teacher and student, including extracurricular activities. Tuition and Students and Instruction Related expenses include the activities involved with assisting staff with the content and process of teaching to students, including curriculum and staff development. General and Business Administration and School Administration expenses include expenses associated with administrative and financial supervision of the District

31 WINFIELD, NEW JERSEY MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 UNAUDITED (CONTINUED) Governmental Activities (Continued) Plant Operations and Maintenance expenses involve keeping the school grounds, buildings, and equipment in an effective working condition. Pupil Transportation expenses includes activities involved with the conveyance of students to and from school, as well as to and from school activities, as provided by State law. The School District s Funds All governmental funds (i.e., general fund and special revenue fund presented in the fund-based statements) are accounted for using the modified accrual basis of accounting. Total revenues amounted to $3,589,454 for 2016 and $3,508,201 for 2015 and expenditures were $3,588,082 for 2016 and $3,620,054 for The net change in fund balance for the year was an increase of $1,372 for 2016 and a decrease of $111,853 for The positive change is most significant in the general fund for 2016 and a negative change for As demonstrated by the various statements and schedules included in the financial section of this report, the District continues to meet its responsibility for sound financial management. The following schedules present a summary of the revenues of the governmental funds for the fiscal year ended June 30, 2016, and the amount and percentage of increases and decreases in relation to prior year revenues. Increase/ Percent of 2016 Percent of (Decrease) Increase/ Revenues Amount Total From 2015 (Decrease) Local Sources $ 1,565, % $ 15, % State Sources 1,961, % 62, % Federal Sources 61, % 2, % Total $ 3,589, % $ 81,253 Local revenues increased by $15,930. The increase in local revenue was due to a tax increase needed to fund the additional expenditures associated with an increase in enrollment and higher operating costs. Federal revenues increased due to additional funding in IDEA and NCLB funds

32 WINFIELD, NEW JERSEY MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 UNAUDITED (CONTINUED) The School District s Funds (Continued) The following schedule represents a summary of general fund and special revenue fund expenditures for the fiscal year ended June 30, 2016, and the percentage of increases and decreases in relation to prior year amounts. Increase/ Percent of 2016 Percent of (Decrease) Increase/ Expenditures Amount Total From 2015 (Decrease) Current Expense: Instruction $ 1,521, % $ 40, % Undistributed 2,042, % (75,201) -3.55% Capital Outlay 10, % % Food Transfers 13, % 3, % Total $ 3,588, % $ (31,972) Changes in expenditures were the results of varying factors. Current expense increased due to additional staff and students, and increased health benefits and utility costs. General Fund Budgeting Highlights The School District s budget is prepared according to New Jersey law, and is based on accounting for certain transactions on a basis of cash receipts, disbursements, and encumbrances. The most significant budgeted fund is the General Fund. Over the course of the year, the District revised the annual operating budget several times. Revisions in the budget were made to recognize revenues that were not anticipated and to prevent over-expenditures in specific line item accounts. Several of these revisions bear notation: TPAF, which is the state s contribution to the pension fund, is neither a revenue item nor an expenditure item to the district but is required to be reflected in the financial statements

33 WINFIELD, NEW JERSEY MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 UNAUDITED (CONTINUED) General Fund Budgeting Highlights (Continued) Tuition for special education students is budgeted based on the existing and known incoming students at the time the budget is submitted. Students move into the District during the summer as well as the school year which necessitates transferring funds to the appropriate account to pay these special education costs. Capital Assets The School District had $31,600 at June 30, 2016 and 2015 invested in land, building, furniture and equipment, and vehicles. Table 4 shows the balances of capital assets (net of depreciation) for fiscal years 2016 and Table 4 Capital Assets (Net of Depreciation) at June 30, Land and Land Improvements $ 31,600 $ 31,600 Machinery and Equipment - - Total $ 31,600 $ 31,600 For more detailed information, please refer to the Notes to the Financial Statements. Debt Administration At June 30, 2016, the School District had $858,626 of outstanding debt. Of this amount, $15,000 is for compensated absences; $14,697 is for capital lease, and $828,929 is for net pension liability. For more detailed information, please refer to the Notes to the Financial Statements. For the Future The Winfield Township School District is in stable financial condition presently. The School District is proud of its community support of the public schools. A concern is the continued growth of the District with the increased reliance on local property taxes. In conclusion, the Winfield Township School District has committed itself to financial stability for many years. In addition, the School District s system for financial planning, budgeting, and internal financial controls are well regarded. The School District plans to continue its sound fiscal management to meet the challenge of the future

34 WINFIELD, NEW JERSEY MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 UNAUDITED (CONTINUED) Contacting the School District s Financial Management This financial report is designed to provide our citizens, taxpayers, investors, and creditors with a general overview of the School District s finances and to show the School District s accountability for the money it receives. If you have questions about this report or need additional information, contact Ms. Gabrielle Conde, School Board Secretary at Winfield Township School District, 7 1/2 Gulfstream Avenue, Winfield, New Jersey

35 BASIC FINANCIAL STATEMENTS 27 27

36 SECTION A - DISTRICT-WIDE FINANCIAL STATEMENTS The statement of net position and the statement of activities display information about the District. These statements include the financial activities of the overall District, except for fiduciary activities. Eliminations have been made to minimize the double-counting of internal activities. These statements distinguish between the governmental and business-type activities of the District

37 A-1 STATEMENT OF NET POSITION JUNE 30, 2016 ASSETS: Cash and Cash Equivalents: Unrestricted - Governmental Business-Type Activities Activities Total $ $ 2,353 $ 2,353 Restricted Interfund Receivables 39,807-39,807 Receivables 7, ,230 Inventories - 1,516 1,516 Capital Assets, Net 31,600-31,600 Total Assets 79,873 4,609 84,482 DEFERRED OUTFLOWS OF RESOURCES: Pensions 201, ,577 Total Deferred Outflows of Resources 201, ,577 LIABILITIES: Cash Overdraft 13,956-13,956 Interfund Payable 41,042-41,042 Accounts Payable 0 3,257 3,257 Deferred Revenue 2,867-2,867 Noncurrent Liabilities: Due Within One Year 7,668-7,668 Due Beyond One Year: Other Long-Term Liabilities 22,029-22,029 Net Pension Liability 828, ,929 Total Liabilities 916,491 3, ,748 DEFERRED INFLOWS OF RESOURCES: Pensions 13,328 13,328 Total Deferred Outflows of Resources 13,328-13,328 NET POSITION (DEFICIT): Net Investment in Capital Assets 31,600-31,600 Restricted for: Other Purposes ,268 65,244 Unrestricted (Deficit) (680,945) (62,916) (743,861) Total Net Position (Deficit) $ (648,369) $ 1,352 $ (647,017) The accompanying Notes to Basic Financial Statements are an integral part of this statement. 29

38 Total Governmental Activities 3,295,620 $ 299,392 4, ,634 - (3,432,688) - (3,432,688) A-2 STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2016 Net (Expense) Revenue and Changes Program Revenues In Net Position Indirect Operating Capital Expenses Charges for Grants and Grants and Governmental Business-Type Functions/Programs Expenses Allocation Services Contributions Contributions Activities Activities Total 30 GOVERNMENTAL ACTIVITIES: Instruction: Regular $ 1,101,237 $ 133,711 $ 4,690 $ - $ - $ (1,230,258) - Special Education 391,399 59,337-97,159 - (353,577) (353,577) Other Special Education 3, (3,788) (3,788) Other Instruction 25,825 3, (29,605) (29,605) Support Services: Tuition 638, (638,145) (638,145) Student and Instruction Related Services 379,386 49, (429,246) (429,246) General and Business Administrative Services 190,307 22, (212,312) (212,312) School Administrative Services 47,992 8, (56,187) (56,187) Plant Operations and Maintenance 349,795 18, (368,625) (368,625) Pupil Transportation 158,320 3,100-60,475 - (100,945) (100,945) Capital Outlay 10, (10,000) (10,000) BUSINESS-TYPE ACTIVITIES: Food Service 61,280 30,315 16,551 - (14,414) (14,414) Total Business-Type Activities 61,280 30,315 16, (14,414) (14,414) Total Primary Government $ 3,356,900 $ 35,005 $ 174,185 $ - $ (3,432,688) (14,414) GENERAL REVENUES: Property Taxes Levied For: General Purposes Federal and State Aid Not Restricted Miscellaneous Income Transfers Total General Revenues Change in Net Position Net Position (Deficit) - Beginning of Year Net Position (Deficit) - Ending $ 1,557,450 $ - $ 1,557,450 1,865,852-1,865,852 3,828-3,828 (13,700) 13,700-3,413,430 13,700 3,427,130 (19,258) (714) (19,972) (629,111) 2,066 (627,045) $ (648,369) $ 1,352 $ (647,017) The accompanying Notes to Basic Financial Statements are an integral part of this statement.

39 SECTION B - FUND FINANCIAL STATEMENTS The individual Fund statements and schedules present more detailed information for the individual fund in a format that segregates information by fund type

40 GOVERNMENTAL FUNDS 32 32

41 B-1 GOVERNMENT FUNDS BALANCE SHEET JUNE 30, 2016 Special General Revenue Fund Fund Total ASSETS: Cash and Cash Equivalents $ - $ 41,042 $ 41,042 Capital Reserve Account Interfund Accounts Receivable 39,807-39,807 Receivables From Other Governments 4,623 2,867 7,490 Total $ Assets 45,406 $ 43,909 $ 89,315 LIABILITIES AND FUND BALANCES: Liabilities: Cash Overdraft $ 54,998 $ - $ 54,998 Interfund Accounts Payable 0 41,042 41,042 Deferred Revenue $ - 2,867 2,867 Total Liabilities 54,998 43,909 98,907 Fund Balances: Reserved For: Capital Reserve Account Unassigned: General Fund (Deficit) (10,568) - (10,568) Total Fund Balances (Deficit) (9,592) - (9,592) Total Liabilities and Fund Balances $ 45,406 $ 43, Amounts reported for governmental activities in the statement of net position (deficit) (A-1) are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. The cost of the assets is $703,872 and the accumulated depreciation is $672, ,600 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. (29,697) Some liabilities, including net pension obligations, are not due and payable in the current period and, therefore, are not reported in the funds. (828,929) Deferred outflows and inflows or resources related to pensions are applicable to future periods and, therefore, are not reported in the funds. Deferred outflows related to pensions 201,577 Deferred inflows related to pensions (13,328) Net Position (Deficit) of Governmental Activities $ (648,369) The accompanying Notes to Basic Financial Statements are an integral part of this statement. 33